Skip to Content

Support MinnPost

MinnPost logo 2014 Summer Member Drive

Readers like you make MinnPost possible
Become a sustaining member today

This coverage is made possible by grants from the Central Corridor Funders Collaborative and The McKnight Foundation.

Affordable housing in the Central Corridor: How much is too much?

The Lyric at Carleton Place is a newer artist-loft project
lyricliving.com
The Lyric at Carleton Place is a newer artist-loft project at University and Hampden Avenues in the Midway area.

A lot is going on around the development of the new Central Corridor light-rail line which, when finished in 2014, will connect the Twin Cities' downtowns.  When I considered writing about it, however, my eyes glazed over. I thought it was construction dust, but more likely it was confusion. Already, there are a bazillion plans, position papers and reports from various groups saying how the area's constituent neighborhoods should look and function once the line is complete. A person like me (too lazy to study all those documents) couldn't possibly get a handle on it all.

But then, the other day a birdie told me that several nonprofits were pushing for the creation of 4,500 units of affordable (aka low-income) housing in the Central Corridor. This birdie, who weighs about 160 pounds and ate a veggie burger while talking to me, thought that the amount was way too much to concentrate in one area. It would, among other things, reinforce the area's identity as a low-income ghetto.   

Characterizing with that one word the six neighborhoods through which the new 11-mile long LRT line will pass, however, isn't really fair. At one end is downtown Minneapolis with its upscale condos and giant Riverside Plaza housing development (low-income). From there, the train passes through the University neighborhood, then through a kind of industrial area now referred to as Midway West, then to the modestly gentrifying Hamline area (Midway Central), Frogtown (Midway East),  hard-hit by foreclosures, and then to the Capitol and downtown.

I soon learned that a major advocate for the affordable housing plan is the Central Corridors Funders Collaborative, which also supports this column (at least until they read this). It turns out that they are a consortium of saintly local and national nonprofits  aiming to invest $20 million into making sure that the light rail benefits people and places in the surrounding neighborhoods. Still, I felt compelled to give their ideas the same hairy eyeball that I cast on everyone else's.

For the record, the CCFC has been also working on ways to encourage business development, job creation and public investment. For housing, however, it joined with Minneapolis, St. Paul and the Twin Cities branch of LISC (Local Initiative Support Corporation), which says it helps "community residents transform distressed neighborhoods into healthy and sustainable communities of choice and opportunity." Together they formed The Big Picture Project under whose umbrella some 43 representatives of community groups, government agencies, foundations, funders, nonprofits and consultants worked to assemble a "Central Corridor Affordable Housing Coordinated Plan." I tell you all this only to give you a feeling for the number of fingers poking around in this particular Central Corridor pot.

Two premises

The plan has two basic premises. First, locating affordable housing near mass transit lines is a plus. People with low incomes are more likely than richer folks (with cars) to use it; and the LRT will give them the ability to find jobs and schooling beyond the immediate neighborhood. Second, the introduction of mass transit will likely boost rents and property values. That development could be a minus, according to the plan, because it could push out folks already there. 

Market forces, of course, are titanic and hard to resist. I pointed out to CCFC's director, Jonathan Sage-Martinson, that if a developer offered a homeowner $500,000 for his house in, say, Frogtown, he'd be gone in a flash. "It's fine if somebody gets a fair price for his house," he said. "We're just concerned about involuntary displacement."

So to accentuate the positive and minimize the negative, the plan lays out three objectives. The most significant is to either build or preserve at least 2,540 units of low-income housing between now and 2020, with an expanded goal of 4,500 units.  

It's impossible to argue that there isn't a need for more low-income housing in the Twin Cities. By the Met Council's standards, a home is "affordable" if it costs a family earning less than 60 percent of the region's median income no more than 30 percent of its income. According to Wilder Research, in 2010, more than a third of all households in the region fell into the "cost-burdened" category, paying more than 30 percent of their annual incomes for housing. Given the limping economy, it's doubtful that the figure would have improved much in the last two years.  

The Big Picture Project's urgency to create affordable housing along the Central Corridor is understandable because earnings there are way below the region's median of $82,700. They range from a high of $51,211 in downtown Minneapolis to a low of  $32,202 in the East Midway section. (The University area has the lowest median income, $24,345, but it's full of students, many living on their parents' dime or loans.) In the St. Paul chunk of the Central Corridor, 46 percent of renters and 31 percent of homeowners are "cost-burdened." 

The vast majority of affordable multi-family housing, whether new or renovated, is subsidized by a federal tax credit program, which gives investors a dollar-for-dollar write-off for a portion of the cost of a project. Each state is given an annual dollar limit based on population, and the state housing agency awards credits to developers according to a Qualified Allocation Plan. For 2012, Minnesota's total is $11.7 million. That's not a lot of dough. If the Big Picture Project achieved its more ambitious goal of 4,500 new housing units over the next eight years, it would eat up most of the tax credits available to the metro, if not the entire state.

Of course, if all the new and presumably safer affordable housing leads to big improvements in the neighborhood, then maybe putting so many units in the Central Corridor would make sense. And obviously, that's what the Big Picture Project is hoping will happen.

Housing and segregation

On the other side of the side of the coin, however, you could argue that putting so much low-income housing in low-income neighborhoods aggravates segregation.   According to Myron Orfield, director of the Institute on Metropolitan Opportunity at the University of Minnesota Law School, since 1986, 83 percent of affordable housing units in the metro have been located in a way that contributes to segregation. And, if you believe, as he does that segregation consigns people to inferior schools and services, then you would want low-income housing scattered throughout the metro rather than concentrated in areas that are already predominantly low-income. Out in areas with well-funded public schools and growing job markets, low-income families often prosper, he argues, and begin their climb up the American Dream ladder.

Sage-Martinson counters, however, that the Big Picture plan advocates a mix of different races and income groups. Problem is, the area is already pretty fairly heavily minority. Only one of its six neighborhoods (University) has a population that's less than 30 percent nonwhite.

That makeup could deepen segregation in St. Paul's schools, which are returning to an old-style neighborhood format, says Jim Hilbert, executive director of the Center for Negotiation and Justice at William Mitchell Law School in St. Paul.  The plan, he says, "does not seem to take schools into account, and it should."

So part of the housing task may be to attract more middle- and upper-income residents. Colleen Carey, president of the Cornerstone Group, a Richfield developer, has acquired land in the Midway West section to create what she calls "an arts oriented urban village" with the Textile Center, yet another nonprofit. She's hoping to include some affordable housing in the 300-unit mix. But she cautions that "the light rail alone is not enough" to make a neighborhood attractive to a diverse group of people. "Everybody wants to live near a train line," she says. "But they want to live on a park."

Stephen Wellington, president of Wellington Management Inc., a St. Paul developer, is passionate about the need for more affordable housing. As the chair of the Plymouth Church Neighborhood Foundation, he has championed the cause. But he's not certain that the Central Corridor is the right place for so much. Or that families in the area will be immediately hit by higher rents and prices. Owners, hoping to cash in on the windfall the LRT will supposedly bring, have listed their properties, he says, "but so far, the interest hasn't been there." 

The Big Picture Project's concern about residents getting pushed out is "laudable," Wellington says, but maybe the area's need for more low-income housing (a lot of it anyway) is not immediate. "I would like to see some market-rate housing along the central corridor, more middle-income people, for more diversity." 

In any case, there's plenty of time to tweak the planning. After all, Queens and Brooklyn did not develop the instant the subways were built. A little more thinking couldn't hurt.

Get MinnPost's top stories in your inbox

Related Tags:

About the Author:

Comments (12)

Howbout this..

Have developers build apartments, condos, row houses, and small single family houses where 20-30% of them are affordable housing, literally randomly sprinkled within the normal ones. Exteriors of the buildings remain the same style/finish quality as the market rate ones but the insides have fewer bells and whistles, have 1 fewer garage spot, etc. the low income families are therefore not concentrated in to poor areas, but mixed healthily with people who pay higher taxes, helping even out the school district disparity. Both types of family have access to transit and a home they are more likely to maintain since the ones around them will be. Just a thought contrary tithe typical segregation that always occurs. Oh, and developers can access state, federal, and non-profit money to offset the market rate loss.

Being Done

This is essentially what's been done in Baltimore, among other places, and it's proven very successful.

Having a hard time wrapping

Having a hard time wrapping my head around these numbers. How many, say 1br - $500/mo, apartments does that translate into? What sort of housing and price range would meet those needs?

CURA addresses neighborhood mix next week

Coincidentally there is a presentation next week offered by CURA that addresses the issue of neighborhood mix: http://www.cura.umn.edu/events/2012-09-26/cura-housing-forum-neighborhoo... From what I can gather, George Galstar feels that a neighborhood composition of 20% or more of financially disadvantage residents places undue stress on the area. It seems counterproductive to give developers public money to provide subsidized housing where the neighborhood mix is unable to maintain basic public goods due to lack of resources.

So

Put all the affordable housing in one area where there is a GUARANTEE there will be insufficient funds to support local business? I don't think the point is to have more than 15-20% mix anyway. Interested what his recommendations are then.

It's not just housing

Affordable housing has to be seen in other contexts, such as employment, transit use and the presence of other institutions.

For instance, housing plus transportation cost is a significant issue for low income households. Locating housing closer to an improved transit system can make more work locations accessible by transit and reduce commute times, reducing the need to own and operate a car just to hold a job.

Housing density also makes the transit system itself more cost effective by increasing ridership. Scattering low income housing around the metro doesn't necessarily address the transportation cost/transit effectiveness issues.

There are major social service resources and large employers located along the line—especially educational and medical institutions. These "eds and meds" are also beginning to collaborate on ways they can better connect with local businesses and potential employees.

Other improvements must take place in the neighborhoods. People don't simply choose where to live based on price. So proximity to shopping, walkable streets, churches, schools, etc. is important in the equation.

It's precisely all that blurry planning that has to be taken into account and acted upon. Dropping affordable housing units into any place without considering how all these forces interrelate does create a potential for failure.

It's not just employment, transit and having other institutions

The problem is gated communities and communities that actively discourage mass transit and maintain restrictive zoning laws are then rewarded by not having to build their fair share of income restricted affordable housing. Neighborhoods and cities that do offer good mass transit options and do not have restrictive zoning practices then are dumped with more than their share of income restricted affordable housing.

It is also problematic and unethical to make certain neighborhoods into social service centers. While it might be efficient and cost effective for the agency it is disastrous for the neighborhood and would be as helpful for the clients as was the warehousing of patients in state mental hospitals in the old days. I worked in a shelter for 6 years and watched the terrible effects of budget cuts. Sadly, I don't know what the solution is especially in a society that seems to want to fund prisons over prevention.

However, without a regional approach, while noble, it is suicidal for any community to take on more than it's share of income restricted housing especially when revenue sharing seems to be going the way of the woolly mammoth.

Affordable housing has to be a regional policy in order for it to succeed. The Met Council needs to enforce the rules on the books that would tie sewer and water services to building and providing affordable housing.

Odd choice of photo

The building pictured at the top of the article, the Lyric at Carlton Place, is market-rate -- not affordable housing.

I don't worry so much about this

light rail has such a track record in other parts of the country of resulting in gentrification it seems unlikely to me that even a few thousand affordable units can push against that tide. I do prefer affordable housing to be a % of each building rather than the whole building, though.

Part of the affordable housing issue is really the lack of a regional authority to force the suburbs to participate. And the suburbs that did participate, like Coon Rapids, did so poorly, with whole developments low-income rather than a % of every development. So the results have been bad.

The biggest problem seems to be that so many housing initiatives are based on the "poor people are icky" belief system, and that is what results in affordable housing being put in separate developments rather than mixed in with the community as part of the community.

This is NOT low income housing, or affordable housing.

Median income in MN about $57,000 a year. According to Marlys "low" income families are those making 60% of the REGIONAL median of $82,000- which would be about $60,000. In other words this housing is affordable for a median income family in MN. Looking the data more closely you will find the over-all median income in St. Paul is $40,000 a year, and Hispanic, Asian, Black, and American Indian median incomes are at or below $30,000 a year. This means that this "low" income housing will be out of reach for everyone but whites in St. Paul who have a median income of $50,000. Developers never build build truly low income housing because even with government assistance they can't charge what they want to charge per unit. This is a gentrification project pretending to be low income housing.

Hmmmm Steve Wellington quoted as an affordable housing advocate?

Yes, Marlys, Steve Wellington does serve as Board Chair of the newly re-named "Portico" formerly, Plymouth Church Neighborhood Foundation (PCNF), an organization doing great work around affordable housing throughout the metro and in that capacity can in fact, speak with some veracity about the issue. HOWEVER, it would be important, erring on the side of transparency in this article, to also point out that Wellington was one of first people to start LAND BANKING on the corridor and building for profit (mainly his and his partners, i mean he basically owns the corner of 280 and University). It adds an important element of compelixity to the Wellington you painted in your article.

Who is making the decisions?

The key is cities and neighborhoods need to have a realistic affordable housing/income restricted policy in place and to understand the needs and goals of the community and how that policy fits into it. The worst thing they can do is to let nonprofits and developers take the lead and dictate solutions for them.